Agile Contracts

Agile ContractsLL.M. Juha Ilola

Turku Agile Day27.2.2013

Wednesday, May 15, 13

© Copyright Reaktor 2013

legal guy @ Reaktor

previously @ major law firm, Sulake

doing legal IT stuff since 2001



Agenda1.Contracts and Lawyers2.Pitfalls of Waterfall3.Agile Contracts



1. Contracts and Lawyers



people really do hate lawyers.



lawyer

unnecessary complexity



drafting contracts is similar to writing code.



a beautiful contract:a contract that

provides the simplest possible solution to enable the purpose of the contract.



negotiation of collaborative contracts should not be

approached as a zero-sum game.



optimize contracts for successful outcome, not for the (imaginary) interests of

one party.



current economic climate does not favor beautiful

contracts.

nevertheless, such beauty is worth fighting for.



2. Pitfalls of Waterfall



waterfall contract

=

fixed price + fixed scope



“the Supplier will deliver to the Customer the

software described in Annex 1 for EUR [price] by

[deadline].”


assumptions in the contract dicatate what

will be done, not real (discovered) needs.



Change Managementthe Supplier will allow change only if there is enough money on the

table.



Fixed price encourages the Supplier to do minimum at

maximum price.



The contract gives the Customer illusion of control, but in fact

the Supplier operates as a black box and

has no incentives for transparency.



3. Agile Contracts



Risks of a software project are best addressed by using agile methods.

Not with contract.

Agile contract should make it possible to capitalize on the ability of agile

methods to provide the Customer with best value for a given budget.



Empiric

Specified



Backlog

Specified in detail

Recognized, required functionalities

Release 1

Fuzzy ideas

Priority



the object of an agile contract should be the performance of service

(as opposed to delivery of specified results).



team members subject to approval of the

Customer.

the Customer has the right require the change of a team

member at any time, for any reason.



contents of the services (i.e. backlog)

are agreed in accordance with the

agile method.

no separate change management is

necessary.



charged on time & material basis on the

basis of realized hours / days.

set max budget?

charges are not tied to the approval of the

results.



alternatively target price can be used.

target price is not ideal, as it requires scope and change

management.

saved or overrun budget should be

divided 50/50.



Reaktor’s satisfaction guarantee:

if the Customer feels that Reaktor has not performed with satisfactory level, they

may notify Reaktor and receive discount of charges relating to last sprint - no

questions asked.



indefinite term contract with

2 - 4 weeks’ notice period.

trial period at the beginning of the

contract?



the Customer should receive all rights or unlimited license to

the results of the services.



Thanks!... remember to further the beauty of simplicity when drafting contracts!


Business

Agile Contracts